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Comment by whoisburbansky | Hacker News Reader

Isn't that exactly what WeWork's business model was?

Yes except that IBM has revenue it generates from people (not) being there, while WeWork only loses money :D.

I'm a bit ignorant of IBMs business model given how many times they've changed businesses. What you're saying is that IBM has a business that generates revenue, but that business continues to exist (and generate revenue) despite people not actively being at a desk, not that IBM has somehow managed to find a way to make money from empty desks, right?

WeWork makes more money from an oversubscription model, and thus could also make money from desks being unused. (Have 10 desks, rent out "13", and hope that all 13 people don't need desks at the same time).

Yes, except this is private to IBM employees. Helpful when you're in an industry with a lot of regulatory / compliance oversight.

All of us naysayers failed to appreciate the foresight that Mr Neumann and Softbank displayed. Joke's on us :D

The fundamentals were not bad ideas. Regus has been doing things similar to WeWork for decades.

Neumann committing fraud, poor cash management, and self-dealing conflicts of interest are what killed WeWork. Not the coworking space concept.

What I don't understand is the multiples at which WeWork was trading.

I could definitely understand the business model (it's cloud computing for real-estate!) and especially cool for remote/business travelers since from what I understand it was rather easy for a WeWork user to use any of their facilities.

People said the same thing about AWS: "Hardware is a commodity, how can they possibly turn a profit renting out hardware?"

It's more that they bill by the capacity used and it's possible to cancel at any time.

Same way a WeWork is more expensive than renting your own real estate but it's probably simpler than getting into a long term lease. Plus if your startup has to scale up WeWork can accommodate, unlike your typical office rental.

You can, if you think of it like a Ponzi scheme.

The pandemic also would have hit them pretty hard had they not semi-collapsed a few months before.

Sorta, but WeWork would be like a middle man parasite compared to leasing directly from the landlord. So not nearly as efficient.

There's probably some management company handling the space in any case.

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